products > overview

UltraTech is India's largest exporter of cement clinker. The company's

production facilities are spread across eleven integrated plants, one
white cement plant, twelve grinding units, and five terminals — four in :: awards
India and one in Sri Lanka. Most of the plants have ISO 9001, ISO :: milestones
14001 and OHSAS 18001 certification. In addition, two plants have
:: management team
received ISO 27001 certification and four have received SA 8000
certification. The process is currently underway for the remaining plants.
The company exports over 2.5 million tonnes per annum, which is about
30 per cent of the country's total exports. The export market comprises
of countries around the Indian Ocean, Africa, Europe and the Middle
East. Export is a thrust area in the company's strategy for growth.
UltraTech's products include Ordinary Portland cement, Portland
Pozzolana cement and Portland blast furnace slag cement.
• Ordinary Portland cement
• Portland blast furnace slag cement
• Portland Pozzolana cement
• Cement to European and Sri Lankan norms
Ordinary Portland cement
Ordinary portland cement is the most commonly used cement for a wide
range of applications. These applications cover dry-lean mixes, general-
purpose ready-mixes, and even high strength pre-cast and pre-stressed
concrete.

Portland blast furnace slag cement

Portland blast-furnace slag cement contains up to 70 per cent of finely
ground, granulated blast-furnace slag, a nonmetallic product consisting
essentially of silicates and alumino-silicates of calcium. Slag brings with
it the advantage of the energy invested in the slag making. Grinding
slag for cement replacement takes only 25 per cent of the energy
needed to manufacture portland cement. Using slag cement to replace
a portion of portland cement in a concrete mixture is a useful method to
make concrete better and more consistent. Portland blast-furnace slag
cement has a lighter colour, better concrete workability, easier
finishability, higher compressive and flexural strength, lower
permeability, improved resistance to aggressive chemicals and more
consistent plastic and hardened consistency.

Portland Pozzolana cement

Portland pozzolana cement is ordinary portland cement blended with
pozzolanic materials (power-station fly ash, burnt clays, ash from burnt
plant material or silicious earths), either together or separately. Portland
clinker is ground with gypsum and pozzolanic materials which, though
they do not have cementing properties in themselves, combine
chemically with portland cement in the presence of water to form extra
strong cementing material which resists wet cracking, thermal cracking
and has a high degree of cohesion and workability in concrete and
 mortar.

Competitors

3027

COMPANYSYMBOL

26 UltraTech ULTCEM
Cement Ltd.

ACC Ltd. ACCLTD

Ambuja AMBCEL
Cements
Ltd.

Andhra ANDCEM
Cements
Ltd.

Barak Valley BARVAL

Cements
Ltd.

Binani BINCEM
Cement Ltd.

Birla BIRCOR
Corporation
Ltd.

Burnpur

The main business of this division is Manufacturing &

marketing of different types of Cement for various
customer segments like Government, Institutions,
Builders / Contractors, Stockists, Cement Based
Industries.
Cement is basically viewed as a commodity and the industry is fragmented with around 50
players. So inorder to command a premium, the brand had to show a significant
differentiation.

Ultratech was positioned as the ' Engineer's choice" cement emphasizing on the qualities such
as Quality, Modernity and technology. The gamble has paid off well for Aditya Birla group
and Ultratech was able to carry the legacy of L&T cement.

Briefing the media on the brand transition, Mr. Birla remarked that the name UltraTech was the
outcome of an indepth research across the country. "We wanted to mirror the DNA of L&T Cement in
the new brand name. Our research study indicated that in the customers' mind, L&T stood for quality,
technology and expertise. The name UltraTech with the tag line "The Engineer's Choice" aptly
captures these features," commented Mr. Birla. The brand transition is expected to be completed in
India by the end of December 2004.

Value chain analysis helps in identifying sources of competitive advantage in a systematic

manner, and thus we use this framework. The cement industry value chain comprises (1)
sourcing of raw materials and fuel from quarries and mines (2) the manufacturing process,
and (3) distribution of the product to the markets.
The sources of competitive advantage identified for UltraTech are:
UltraTech's capabilities in identifying, and leasing, higher quality raw material quarries
results in significant cost savings for them.
Sourcing of Raw Materials: UltraTech's greatest strength is its raw material sourcing.
Limestone quarries are usually leased from the government on a long-term basis (usually at
least 25-30 years). UltraTech's capabilities in identifying, and leasing, higher quality raw
material quarries results in significant cost savings for them. This source of long-term
competitive advantage is due to their people skills which aid in identifying the sources and
their terms of leasing which lock in these resources for the long term. Clearly, this resource is
valuable and rare.
Fuel used in Manufacturing Process: The manufacturing process offers no distinct
competitive advantage to UltraTech or its largest competitor ACC, though ACC enjoys lower
fuel cost. However, this is not sustainable, and since UltraTech has already started switching
to coal, ACC's advantage is likely to be neutralized in the near future.
Financial and Human resource advantage: UltraTech, being a part of the Aditya Birla
Group, has access to the deep pockets of its promoters, as well as human capital of the
highest quality. While financial resources may be rare and inimitable, non-substitutability is
debatable. Evidence suggests that in the long term others like the Holcim group can match the
financial resources of ABG.6 Higher quality of human capital might be more valuable in the
long run, and given their astute knowledge of the Indian market, ABG might be able to
leverage this resource better than their foreign counterparts.
A final point to note is that UltraTech has higher operating leverage than ACC. This by itself
is neither a source of competitive advantage nor a disadvantage. In the long run, the gains
during the 'up' years will be smoothened by the 'down' years of the cement cycle